THE INCOME TAX FORMS.

New Zealand Herald, Volume XXXII, Issue 9831, 28 May 1895, Page 6

THE INCOME TAX FORMS.

EXPLANATION BY THE COMMISSIONER.

A few days ago an interview took place between the members of a committee of the Chamber of Commerce at Dunedin, and Mr. McGowan, the Commissioner of Taxes, in reference to the income Tax forms lately issued. We give the following extract from the Commissioner's explanation :— Two points wore raised by the president in his opening remarks at the meeting, one being a suggestion that objections or appeals from the income tax assessment should be heard by a stipendiary magistrate, who would be supported by two gentlemen conversant with mercantile law and practice rather than by the magistrate himself sitting alone. . To enable this to be done, he (Mr. McGowan) pointed out would require an amendment of the law. The second suggestion which the presidenb of the chamber made was contained in the concluding paragraph of the letter to the Premier, and was to the effect thab the income tax assessment should be, as in England, based upon an average of three years' This also, he (the Commissioner) pointed out, required an amendment of the law, and would not obviate the necessity for calling for annual returns, because the assessment would fall upon the average of a different set of three years as each year came round, and would really entail more labour than the present plan. Stress had been laid in the letter upon the amount of labour involved in compiling the new returns if the form was to be strictly adhered to. The only purpose which they had either in sending accountants to advise with the people in business as to the proper way to make up their returns, or in issuing the income tax form in its present shape, was to prevent mistakes, which the wisest were liable to fall into at times. A great many assessments had been revised in this and other towns, bat the mistakes had arisen nob with any distinct design on the part of people to understate their income, but from a want of knowledge of the requirements of the Act. Amongst deductions were frequently found interest on partner's capital, partner's drawings (weekly or monthly), the statutory exemption, income tax paid, and a variety of other deductions which, although properly included in a profit and loss account, were nob allowable as deductions when arriving at the sura on which income tax was payable. On the other hand there were found amongst the items of income rents of houses, shops, and farms, dividends from companies, and other items not properly included for income tax purposes. In the case of the income returns these items were eliminated, and in the case of the deductions the amounts improperly taken credit for were disallowed, and amended asssessments submitted, which in nearly all case were agreed to by the representatives of the businesses concerned. Whilst saying without fear of contradiction that a qualified accountant can transfer the figures from a properly-com-piled profit and loss account to the new form in a comparatively short time, he also pointed out that the form was intended to show what items of income should be properly included and what items should be included amongst or excluded from the deductions ; and he maintained thab if the form was strictly adhered to in every respect no one could make a mistake in stating the amount of his taxable income. He assured the committee of the Dunedin Chamber of Commerce that the object of the Income Tax department was simply to obtain correct returns of the income with the least possible amount of trouble to taxpayers and to the department. The department had in very many cases urged tradespeople to keep better books, and had gone to no small trouble to assist; and if this was accomplished some good might result to the business community through the visits of the departmental officers and the adoption of the new form.